Invest in yourself by falling into debt
A deep dive into "Rich Dad, Poor Dad" and its author, Robert Kiyosaki.
If you’re at the airport and need to waste an hour before your flight and walk into the nearest shop, I’m sure you’ll see Robert Kiyosaki’s face staring back at you.
Kiyosaki’s “Rich Dad, Poor Dad” has been on the bestseller list since its publication in 1997. Naturally, if you’re a person who’s interested in learning about money, you will probably pick this book up. 32 million people have.
And 32 million people have been inundated with financial advice from a scammer who villainizes poor people all while being $1 billion in debt.
The scammer himself
Robert Kiyosaki gives us a little glimpse into his childhood in “Rich Dad, Poor Dad”, but as it almost reads as some sort of fable, it’s hard to decipher what’s accurate and what’s not. I’ll dive more into this later.
In 1997, Kiyosaki started his own business called Rippers which focused on velcro wallets (you know the ones you get when you’re twelve) which soon filed for bankruptcy. Bankruptcy and debt is a pattern for Kiyosaki and one he actually seems to be proud of.
He’s filed for bankruptcy at least three times and in January of this year, Kiyosaki himself revealed that he was $1.2 billion in debt due to his real-estate investments and the fact that he turns all of his money into gold. In a reel he stated, "I'm a billion and two in debt. I use debt as money and I don't save cash. If I go bust, the bank goes bust. Not my problem."
Does this sound suspicious to you? It should.
On Kiyosaki’s journey to wealth, he has a history of profiting off of the vulnerable and using manipulation tactics to take money from people who don’t have it.
He got his first rise to fame due to the multi-level marketing (MLM) industry, an industry of companies that rely on their distributors to recruit others and then profit off of their sales. It’s a literal pyramid scheme model that most MLMs have been able to maintain due to the fact that they claim that they sell products and that money isn’t made from recruiting (it is).
One of the most prominent MLMs in history, Amway, gave Kiyosaki a huge stage due to one of the top Amway distributors reading “Rich Dad, Poor Dad” before it came out and inevitably realizing what a great manipulation tactic it would be for his downline. He sold the book to his downline as well as to the rest of Amway and popularized it in other MLMs which ultimately skyrocketed the book to bestselling status.
MLMs continue to use Kiyosaki’s books and trainings to manipulate their followers to keep spending money they don’t have in order to “invest” in themselves. When the only thing they’re truly investing in is the MLM company they’re currently working for. Imagine having to pay your employer every month instead of them paying you.
On top of profiting off of the predatory MLM industry, Kiyosaki decided to start a scam of his own: seminars. In these “Rich Dad” seminars, people would come for free to hear money advice only to be told that the real seminars were $500, which they would have to pay if they wanted to learn anything. In 2010, the Canadian Broadcast Corporation did an incredible expose in which they secretly attended and filmed one of these seminars, exposing it as a scam.
In the $500 seminar, trainers continue to sell you courses, urging people to sign up for a three day seminar that’s $1.2k. In those seminars, they encourage you to sign up for “advanced” courses which can reach $45k.
In the expose, there’s videos of the trainers telling attending in the seminar to call their banks that exact second to ask for their credit score to be raised to $45k so that they can buy the advanced courses.
A little real money advice: when people encourage you to invest money you don’t have, there will never be a limit on how much you need to invest before you’re “successful”. When people keep asking you for more money in order to give you real advice, that advice will never come.
Kiyosaki has continued his scam of a company which still sells courses, coaching books, a board game, and now an online collaborative game platform.
Eat the poor: a look inside the book
“Rich Dad, Poor Dad” follows Kiyosaki’s life as he grew up with a “poor dad” and at the age of nine starts working for his friend’s dad (child labor laws, be gone). This “rich dad” teaches him everything he needed to know about how to be rich.
Scammers always be scamming, so it’s no surprise to learn that even the premise of this book is a lie. Kiyosaki’s real father is portrayed as an unsuccessful and poor man. In reality, his father was a professor and had a PhD. But, even that isn’t successful in Kiyosaki’s mind.
And to Kiyosaki, being unsuccessful and being poor is the worst thing you can possibly be.
When comparing his two fathers (rich and poor), Kiyosaki continuously shames his real father when it came to his thoughts about money. In one example he shared that his poor dad had a habit of saying, “I can’t afford it” while the other asked “How can I afford it?” Kiyosaki states that “One is a statement, and the other is a question. One lets you off the hook, and the other forces you to think.” He goes on to say that saying you can’t afford something is a sign of mental laziness.
This sounds inspiring at first glance, but it’s more sinister than that. Firstly, this allows Kiyosaki himself to take advantage of this mentality and if anyone ever tells him they can’t afford to buy one of his courses or programs, then he can say that they’re just being lazy. This will manipulate a person into buying something they can’t afford because shame is powerful marketing.
It also ignores systemic reasons why someone may not have enough money. These systems can’t be changed by thinking harder about how you may get money. That’s a quick fix (if you’re able to achieve it) and something that doesn’t fix larger systemic issues.
Kiyosaki doesn’t completely ignore these systemic issues, but rather than addressing the real problem of the system of poverty in America, he blames poor people.
According to Kiyosaki, the biggest reason why there are so many poor people has nothing to do with society and everything to do with mindset: “The main cause of poverty or financial struggle is fear and ignorance, not the economy or the government or the rich. It’s self-inflicted fear and ignorance that keep people trapped.”
Something Kiyosaki doesn’t seem to want to understand (because he’s currently benefiting from it) is that in a capitalistic society, the vast majority of people will always be “financially needy” because the wealth gap created by capitalism keeps this in place. Wealthy people need there to be financially needy people in order to maintain their level of wealth.
In fact, there’s one point in the book where he demonizes the story of Robin Hood because he claims that taking from the rich only causes more pain for poor people.
Instead of placing the reason for poverty on capitalism or the rich, Kiyosaki continues to shame poor people, even when he admits that they’re being exploited.
In a story being told by Kiyosaki’s rich dad, the rich dad states: “‘‘Some people say I exploit people because I don’t pay as much as the sugar plantation or the government. I say the people exploit themselves. It’s their fear, not mine.’”
Placing blame on people who are being exploited because they’re afraid is such a wild take.
And one Kiyosaki glorifies.
While shaming poor people is bad enough to begin with, Kiyosaki doesn’t stop there. Instead he actually villainizing poor people by stating things like “WARNING: Don’t listen to poor or frightened people.” and “Poor people are more greedy than rich people.”
And villainizing poor people ultimately helps Kiyosaki reach his end goal and message that rich people shouldn’t be taxed. Like, literally at all. It’s not even that they should be taxed less. It should be that rich people shouldn’t have to pay any taxes.
He states, “‘Taxes punish those who produce and rewards those who don’t produce.’”
Given all of this, it’s no surprise that Donald Trump is his co-author.
I’m sorry, did you say Donald Trump?
I did. While Trump had nothing to do with “Rich Dad, Poor Dad”, he did co-write two books with Kiyosaki. Which makes sense; scammers attract other scammers and arguably Donald Trump is one of the most effective scammers in our modern day history.
The two books Kiyosaki and Trump wrote together, “Midas Touch” and “Why We Want You to be Rich”, both center around real-estate and becoming a landlord.
The two have also done YouTube seminars and podcasts together. Throughout his presidential campaign, Kiyosaki has been a staunch supporter and continues to be to this day (just recently tweeting about his concerns about Trump’s current trial).
Let’s talk about the actual money advice
We’ve established that the author is a scammer, hates poor people, and that his writing is bad. But what about the actual money advice that Kiyosaki gives?
The largest piece of money advice that Kiyosaki gives is the importance of investments. Invest, invest, invest. Which is easy enough advice if you have money to begin with. But if people are reading a book about how to become rich, it may be safe to assume that they’re maybe not making enough money.
His advice?
Buy real estate, start a business, or buy stocks and bonds. He also talks about the importance of turning your investments into tangible assets like gold.
Hardly a solution for people who don’t have money to begin with. Or it’s just a solution to get people into debt, quickly.
All of which circles back to Kiyosaki’s scammy interests in making you pay for his products (to invest in yourself), even when you can’t really afford them.
Which circles back all the way back to his big break within the MLM industry. At the end of the day, MLMs are built off of this model that people will keep buying things they can’t afford in order to “invest” in themselves. And by the time they’ve realized that they’re a part of a pyramid scheme, the MLM company would have already taken all of their money they have to give. Kiyosaki is attempting to do the same thing.
So, the next time you have an hour to kill at the airport and see Kiyosaki’s face staring back at you, don’t pick up the book. Find another one. Any other one. There’s no need to be scammed on your next flight.